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Merging of the Agricultural Retail and Partrite Businesses of AFGRI Operations Ltd with Senwes Ltd.
AFGRI Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1995/004030/06
ISIN: ZAE000040549
JSE share code: AFR
("AFGRI" or "the Company")
THE MERGING OF THE AGRICULTURAL RETAIL AND PARTRITE BUSINESSES OF
AFGRI OPERATIONS LIMITED ("AFGRI OPERATIONS") WITH THE AGRICULTURAL
RETAIL BUSINESS OF SENWES LIMITED ("SENWES")
Shareholders are referred to the SENS announcement of 31 July 2012 (“the previous
SENS announcement”) wherein shareholders were advised that AFGRI Operations, a
wholly owned subsidiary of the Company, and Senwes have entered into binding sale of
business agreements with Business Venture Investments No 1658 Proprietary Limited
("Newco") in terms of which, AFGRI Operations and Senwes will merge their respective
agricultural retail businesses (“ the AFGRI Retail Business” and the “Senwes Retail
Business” respectively), as well as the Partrite wholesale business (“Partrite”) of
AFGRI Operations ("the Transaction"). Further to the previous SENS announcement
shareholders are now advised that:
1. AFGRI, AFGRI Operations and Senwes have approved the final valuation of the
AFGRI Retail Business, Partrite and the Senwes Retail Business.
2. As the valuation of the AFGRI Retail Business and Partrite (“AFGRI Value”) is less
than that of the Senwes Retail Business (‘Senwes Value”), AFGRI Operations will
make a cash payment to Newco to ensure that the AFGRI Value and the Senwes
Value are equal.
3. Accordingly the purchase consideration for the Senwes Retail Business will be
discharged by Newco by the issue to Senwes of 50% of the authorised shares of
Newco as well as the payment by AFGRI of a cash amount of R93.7 million to Newco.
4. Shareholders will be advised when the final suspensive conditions to the Transaction,
including approval by the Competition Authorities, have been fulfilled.
5. Unaudited Pro forma financial effects of the Transaction
5.1 The table below sets out the updated unaudited pro forma financial effects of the
Transaction on AFGRI’s earnings per share (“EPS”) headline EPS (“HEPS”), net
asset value per share (“NAV”) and tangible NAV (“TNAV”) since the previous
SENS announcement.
5.2 The unaudited pro forma financial effects, which are the responsibility of the
directors of AFGRI, have been prepared for illustrative purposes only and
because of their pro forma nature may not fairly represent AFGRI’s financial
position, changes in equity, results of operations or cash flows.
5.3 The unaudited pro forma financial effects have been prepared using the
accounting policies that comply with International Financial Reporting Standards
and that are consistent with those applied in the audited group results for the
twelve months ended 30 June 2012.
5.4 These calculations exclude any possible future synergistic benefits resulting from
the Transaction.
After(2) After(3) the
Before Deposita Transaction Change(4)
For the year ended 30 June 2012 (cents) Transaction (cents) (%)
EPS3 58.3 59.3 68.9 16.27
HEPS3 56.6 57.1 57.5 0.67
NAV4 491.3 491.8 506.8 3.04
TNAV4 393.3 393.8 408.7 3.79
Weighted average number of
AFGRI
shares in issue (millions) 333.6 333.6 333.6 333.6
Diluted weighted average number
of AFGRI shares in issue (millions) 357.0 357.0 357.0 357.0
Notes and assumptions:
1. The AFGRI financial information reflected in the “Before” column has been
extracted from the published audited group results of AFGRI for the twelve months
ended 30 June 2012.
2. The disposal by AFGRI Operations of its shareholding and intellectual property in
Deposita Systems Proprietary Limited as announced on SENS on 23 November
2012 (“Deposita.Transaction”)
3. The AFGRI financial information reflected in the “After” column has been calculated
on the basis that the Transaction would be implemented based on the published
audited group results of AFGRI for the twelve months ended 30 June 2012.
4. The change reflects the difference between the After Deposita Transaction and
After the Transaction column on a percentage basis.
5. The pro forma adjustments to the published audited group statement of
comprehensive income have been calculated on the assumption that the
Transaction was implemented on 1 July 2011.
6. The pro forma adjustments to the published audited group statement of financial
position have been calculated on the assumption that the Transaction was
implemented on 30 June 2012.
7. The 50% shareholding in Newco is valued at R 199 million after the net working
capital of R 291 million of the Afgri Retail Business has been settled in cash by
Newco. .
Centurion
4 December 2012
Attorneys for the Company and AFGRI Operations
Webber Wentzel
Attorneys for Senwes
Cliffe Dekker Hofmeyr
Sponsor of the Company
Investec Bank Limited
Date: 04/12/2012 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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